Tips for Financing a Franchise Loan
If you’re looking to purchase or run a franchise it hasn’t been easy to get a franchise loan in the past few years. But times are starting to look up and some of the numbers from the Small Business Administration are promising. If you’re looking to purchase a franchise, getting the best franchise loan is important.
But how do you go about looking for loans and loan options for the franchise you want to buy?
Here a few tips for financing a franchise loan:
- Banks are the best franchise loan option – Many commercial banks give out loans to purchase franchises. But you must have a good credit rating. If your application is rejected you can request a SBA-backed loan. Some franchisors offer partial financing to franchisee owners. Veterans, military personnel transitioning to civilian life and spouses of veterans can apply for loans from a government program called Patriot Express, which has fast approval times and low rates.
- Prepare you loan documents – include copies of tax returns from the past three years, all documents relating to the verification of the source of your down payment and personal finance statements.
- Get enough collateral – to secure a franchise loan, get a mortgage on your residential property and prepare to put up money against the loan. Banks prefer that you put up at least 20 percent of the amount of the loan to approve your loan.
- Choose the best franchises – Banks and other lenders prefer franchisors that have a good track record and have proven they are immune to fluctuations in the economy and can withstand harsh economic times. Chose franchisors that have a lot of successful branches and have a good financial record. You need to be able to prove that the franchise you plan to open has been able to do well in all types of financial times.
When it comes to choosing a best franchise, intelligent Connecticut residents have selected Between Rounds, the bakery cafe and bagel shop franchise that offers the appeal of a locally owned, community gathering place, the quality of freshly made bagels and other baked goods and excellent unit financial performance with wholesale distribution opportunities.
The financial performance of Between Rounds cafes is $620,000 for a single store average and $2,057,000 for the average three store and whole combined annual volume. Between Rounds compares favorably with other bakery café and bagel franchises and bakery cafes are one of the fastest growing dining concepts according to a Technomic study.
Between Rounds Founders, Jerry and Joe Puiia are committed to helping franchise partners operate a successful Between Rounds Bakery Sandwich Café in their community.